Bush Knows It Won't Work. That's Why He's Doing It.

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Tuesday August 22, 2006 · 5:57 AM PDT

2006/08/22 · 05:57

Hot on the heels of the news that Bush has made a de facto estate-tax repeal by gutting the IRS' ability to catch and punish wealthy tax cheats, we find out about this charming little bit of news:

If you owe back taxes to the federal government, the next call asking you to pay may come not from an Internal Revenue Service officer, but from a private debt collector.
Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers -- each of whom owes $25,000 or less in back taxes -- to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers.
The move, an initiative of the Bush administration, represents the first step in a broader plan to outsource the collection of smaller tax debts to private companies over time. Although I.R.S. officials acknowledge that this will be much more expensive than doing it internally, they say that Congress has forced their hand by refusing to let them hire more revenue officers, who could pull in a lot of easy-to-collect money.

More on this on the jump. (Crossposted at Mercury Rising.)

How much better off would the IRS be if it were simply allowed to hire more staff? This much better:

The private debt collection program is expected to bring in $1.4 billion over 10 years, with the collection agencies keeping about $330 million of that, or 22 to 24 cents on the dollar.
By hiring more revenue officers, the I.R.S. could collect more than $9 billion each year and spend only $296 million or about three cents on the dollar to do so, Charles O. Rossotti, the computer systems entrepreneur who was commissioner from 1997 to 2002, told Congress four years ago.

In other words, privatizing the IRS -- just like privatizing state-run pension funds like Social Security -- is not only more expensive, it's not as efficient as simply giving the Federal professionals the tools and money needed to do their jobs.

But of course with decades of Ayn-Randroidian conservative radio and TV commentators from Rush Limbaugh to Lou Dobbs telling us how eeeevillll all gummint is (and with Grover 'drown the government in the bathtub' Norquist serving as the RNC's policy guru), very few people in power can see past the neocon gaslighting to the grim reality. In fact, for most of these people, causing the government to fall apart is their real job.

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